PPG Posts Record Fourth-Quarter and Full-Year Results
PITTSBURGH – Paint and coatings manufacturer PPG Industries, Pittsburgh, has reported fourth-quarter 2012 net sales of $3.6 billion and record fourth-quarter adjusted earnings per share of $1.53, up 10 percent versus 2011. Earnings for the coatings segment grew 30 percent in the fourth quarter and 20 percent for the year. The company reported full-year adjusted earnings per share of $7.94 and full-year sales of $15.2 billion. The company did well across regions, with improved full-year earnings in each major global region.
Net income for the quarter was $227 million, or $1.46 per diluted share, including nonrecurring charges. Adjusted net income for the quarter, excluding the nonrecurring charges, was $238 million, or $1.53 per diluted share. Fourth-quarter 2011 net sales were $3.5 billion, and net income was $216 million, or $1.39 per diluted share.
PPG’s annual sales for 2012 were $15.2 billion, an increase of 2 percent versus 2011 sales of $14.9 billion. The company’s full-year 2012 net income was $941 million, or $6.06 per diluted share, versus 2011 net income of $1.1 billion, or $6.87 per diluted share. Full-year 2012 adjusted net income was $1.2 billion, or $7.94 per diluted share.
Fourth-quarter 2012 net income includes after-tax charges of $11 million, or 7 cents per diluted share, for acquisition-related costs and costs directly related to the separation of the commodity chemicals business and merger with a subsidiary of Georgia Gulf Corp. The company anticipates additional acquisition- and separation-related costs in the first quarter 2013. There were no nonrecurring charges in last year’s fourth quarter or full year 2011.
“Our record fourth quarter results capped off an exceptional year for the company, driven by excellent operating performance and several significant strategic actions that have accelerated the pace of our portfolio transformation,” said Charles E. Bunch, PPG Chairman and CEO. “During the quarter, as we did during the first nine months, we grew our sales and earnings despite moderate overall economic conditions that varied by region and end-use market, and continued negative impacts from currency translation.
“Our coatings businesses continued to perform well, growing earnings by 30 percent versus last year’s fourth quarter, and the Optical and Specialty Materials segment delivered similar earnings growth. Commodity Chemicals segment earnings strengthened versus last year despite lower than anticipated sales and higher costs stemming from two unplanned production outages. Full-year earnings for the Commodity Chemicals segment exceeded the prior-year record. Glass segment earnings were lower, as market conditions for fiber glass remained challenging.
“In summary, 2012 was an excellent year for PPG and its shareholders. We achieved new adjusted-earnings-per-share records in each quarter and delivered higher full year earnings in each major region, including Europe, reflecting our strong operating execution,” Bunch said. “We continued our history of strong cash generation, delivering record full-year cash from operations and ending the year with $2.4 billion of cash and short-term investments. We also raised our annual dividend payout for the 41st consecutive year, a legacy we are proud to continue.”
Looking ahead, Bunch said he anticipates economic trends will remain varied by region in 2013, with a solid growth bias remaining in North America, improving growth prospects in Asia and subdued activity levels in Europe.
Performance Coatings segment sales for the quarter were $1.2 billion, up 1 percent versus the prior year. Segment sales benefited from continued strength in aerospace demand, high single-digit percentage growth in U.S. architectural coatings sales and modest organic sales gains in automotive refinish. Sales in the quarter were negatively impacted by further weakening in marine new-build activity and lower architectural coatings volumes in emerging regions.
Industrial Coatings segment sales for the quarter were $1.1 billion, an increase of $95 million, or 9 percent, versus the prior year. Strong volume growth continued in North America and emerging regions, more than offsetting persistently weak European demand. Volume growth remained the strongest in automotive OEM (original-equipment manufacturer) coatings, with company results continuing to outpace industry growth. The packaging coatings business also experienced volume growth in all regions. Demand in the industrial coatings business varied by end-use application, including weaker consumer electronics demand partly offset by higher automotive parts activity.
Architectural Coatings – EMEA (Europe, Middle East and Africa) segment sales for the quarter were $465 million, an increase of $16 million, or 4 percent, versus the prior year. Sales volumes declined 2 percent and currency translation was negative, but these declines were countered by increased sales related to the Dyrup acquisition, which added about 4 percent to segment sales, and improved pricing.